[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6513 Introduced in House (IH)]
110th CONGRESS
2d Session
H. R. 6513
To amend the Federal securities laws to enhance the effectiveness of
the Securities and Exchange Commission's enforcement, corporation
finance, trading and markets, investment management, and examination
programs, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
July 16, 2008
Mr. Kanjorski (for himself, Mr. Bachus, Mr. Frank of Massachusetts, Ms.
Pryce of Ohio, Mr. Meeks of New York, Mr. Campbell of California, Ms.
Bean, Mr. Davis of Kentucky, Mr. Hinojosa, Mr. Roskam, Mr. Moore of
Kansas, Mr. Castle, Mr. Scott of Georgia, Mr. Shays, Mr. Hodes, and
Mrs. Capito) introduced the following bill; which was referred to the
Committee on Financial Services
_______________________________________________________________________
A BILL
To amend the Federal securities laws to enhance the effectiveness of
the Securities and Exchange Commission's enforcement, corporation
finance, trading and markets, investment management, and examination
programs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Securities Act of
2008''.
(b) Table of Contents.--The table of contents for this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Authority to impose civil penalties in cease and desist
proceedings.
Sec. 3. Formerly associated persons.
Sec. 4. Scope of exemption from State securities regulation.
Sec. 5. Covered securities.
Sec. 6. Collateral bars.
Sec. 7. Unlawful margin lending.
Sec. 8. Securities Investor Protection Act of 1970 amendments.
Sec. 9. Annual testimony on reducing complexity in financial reporting.
Sec. 10. Equal treatment for self-regulatory organization rules.
Sec. 11. Lost and stolen securities.
Sec. 12. Fingerprinting.
Sec. 13. Clarification that section 205 of the Investment Advisers Act
of 1940 does not apply to State-registered
advisers.
Sec. 14. Amendments to section 31 of the Securities Exchange Act of
1934.
Sec. 15. Protecting confidentiality of materials submitted to
Commission.
Sec. 16. Sharing privileged information with other authorities.
Sec. 17. Technical corrections.
Sec. 18. Conforming amendments for the repeal of the Public Utility
Holding Company Act of 1935.
Sec. 19. Nationwide service of subpoenas.
SEC. 2. AUTHORITY TO IMPOSE CIVIL PENALTIES IN CEASE AND DESIST
PROCEEDINGS.
(a) Under the Securities Act of 1933.--Section 8A of the Securities
Act of 1933 (15 U.S.C. 77h-1) is amended by adding at the end the
following new subsection:
``(g) Authority To Impose Money Penalties.--
``(1) Grounds for imposing.--In any cease-and-desist
proceeding under subsection (a), the Commission may impose a
civil penalty on a person if it finds, on the record after
notice and opportunity for hearing, that--
``(A) such person--
``(i) is violating or has violated any
provision of this title, or any rule or
regulation thereunder; or
``(ii) is or was a cause of the violation
of any provision of this title, or any rule or
regulation thereunder; and
``(B) such penalty is in the public interest.
``(2) Maximum amount of penalty.--
``(A) First tier.--The maximum amount of penalty
for each act or omission described in paragraph (1)
shall be $6,500 for a natural person or $65,000 for any
other person.
``(B) Second tier.--Notwithstanding paragraph (A),
the maximum amount of penalty for each such act or
omission shall be $65,000 for a natural person or
$325,000 for any other person if the act or omission
described in paragraph (1) involved fraud, deceit,
manipulation, or deliberate or reckless disregard of a
regulatory requirement.
``(C) Third tier.--Notwithstanding paragraphs (A)
and (B), the maximum amount of penalty for each such
act or omission shall be $130,000 for a natural person
or $650,000 for any other person if--
``(i) the act or omission described in
paragraph (1) involved fraud, deceit,
manipulation, or deliberate or reckless
disregard of a regulatory requirement; and
``(ii) such act or omission directly or
indirectly resulted in substantial losses or
created a significant risk of substantial
losses to other persons or resulted in
substantial pecuniary gain to the person who
committed the act or omission.
``(3) Evidence concerning ability to pay.--In any
proceeding in which the Commission may impose a penalty under
this section, a respondent may present evidence of the
respondent's ability to pay such penalty. The Commission may,
in its discretion, consider such evidence in determining
whether such penalty is in the public interest. Such evidence
may relate to the extent of such person's ability to continue
in business and the collectability of a penalty, taking into
account any other claims of the United States or third parties
upon such person's assets and the amount of such person's
assets.''.
(b) Under the Securities Exchange Act of 1934.--Subsection (a) of
section 21B of the Securities Exchange Act of 1934 (15 U.S.C. 78u-2(a))
is amended--
(1) by striking ``(a) Commission Authority To Assess Money
Penalties.--In any proceeding'' and inserting the following:
``(a) Commission Authority To Assess Money Penalties.--
``(1) In general.--In any proceeding'';
(2) by redesignating paragraphs (1) through (4) of such
subsection as subparagraphs (A) through (D), respectively and
moving such redesignated subparagraphs and the matter following
such subparagraphs 2 ems to the right; and
(3) by adding at the end of such subsection the following
new paragraph:
``(2) Cease-and-desist proceedings.--In any proceeding
instituted pursuant to section 21C of this title against any
person, the Commission may impose a civil penalty if it finds,
on the record after notice and opportunity for hearing, that
such person--
``(A) is violating or has violated any provision of
this title, or any rule or regulation thereunder; or
``(B) is or was a cause of the violation of any
provision of this title, or any rule or regulation
thereunder.''.
(c) Under the Investment Company Act of 1940.--Paragraph (1) of
section 9(d) of the Investment Company Act of 1940 (15 U.S.C. 80a-
9(d)(1)) is amended--
(1) by striking ``(1) Authority of commission.--In any
proceeding'' and inserting the following:
``(1) Authority of commission.--
``(A) In general.--In any proceeding'';
(2) by redesignating subparagraphs (A) through (C) of such
paragraph as clauses (i) through (iii), respectively and by
moving such redesignated clauses and the matter following such
subparagraphs 2 ems to the right; and
(3) by adding at the end of such paragraph the following
new subparagraph:
``(B) Cease-and-desist proceedings.--In any
proceeding instituted pursuant to subsection (f)
against any person, the Commission may impose a civil
penalty if it finds, on the record after notice and
opportunity for hearing, that such person--
``(i) is violating or has violated any
provision of this title, or any rule or
regulation thereunder; or
``(ii) is or was a cause of the violation
of any provision of this title, or any rule or
regulation thereunder.''.
(d) Under the Investment Advisers Act of 1940.--Paragraph (1) of
section 203(i) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-
3(i)(1)) is amended--
(1) by striking ``(1) Authority of commission.--In any
proceeding'' and inserting the following:
``(1) Authority of commission.--
``(A) In general.--In any proceeding'';
(2) by redesignating subparagraphs (A) through (D) of such
paragraph as clauses (i) through (iv), respectively and moving
such redesignated clauses and the matter following such
subparagraphs 2 ems to the right; and
(3) by adding at the end of such paragraph the following
new subparagraph:
``(B) Cease-and-desist proceedings.--In any
proceeding instituted pursuant to subsection (k)
against any person, the Commission may impose a civil
penalty if it finds, on the record after notice and
opportunity for hearing, that such person--
``(i) is violating or has violated any
provision of this title, or any rule or
regulation thereunder; or
``(ii) is or was a cause of the violation
of any provision of this title, or any rule or
regulation thereunder.''.
SEC. 3. FORMERLY ASSOCIATED PERSONS.
(a) Member or Employee of the Municipal Securities Rulemaking
Board.--Section 15B(c)(8) of the Securities Exchange Act of 1934 (15
U.S.C. 78o-4(c)(8)) is amended by striking ``any member or employee''
and inserting ``any person who is, or at the time of the alleged
misconduct was, a member or employee''.
(b) Person Associated With a Government Securities Broker or
Dealer.--Section 15C of the Securities Exchange Act of 1934 (15 U.S.C.
78o-5) is amended--
(1) in subsection (c)(1)(C), by striking ``or seeking to
become associated,'' and inserting ``seeking to become
associated, or, at the time of the alleged misconduct,
associated or seeking to become associated'';
(2) in subsection (c)(2)(A), by inserting ``, seeking to
become associated, or, at the time of the alleged misconduct,
associated or seeking to become associated'' after ``any person
associated''; and
(3) in subsection (c)(2)(B), by inserting ``, seeking to
become associated, or, at the time of the alleged misconduct,
associated or seeking to become associated'' after ``any person
associated''.
(c) Person Associated With a Member of a National Securities
Exchange or Registered Securities Association.--Section 21(a)(1) of the
Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended by
inserting ``, or, as to any act or practice, or omission to act, while
associated with a member, formerly associated'' after ``member or a
person associated''.
(d) Participant of a Registered Clearing Agency.--Section 21(a)(1)
of the Securities Exchange Act of 1934 (15 U.S.C. 78u(a)(1)) is amended
by inserting ``or, as to any act or practice, or omission to act, while
a participant, was a participant,'' after ``in which such person is a
participant,''.
(e) Officer or Director of a Self-Regulatory Organization.--Section
19(h)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78s(h)(4))
is amended--
(1) by striking ``any officer or director'' and inserting
``any person who is, or at the time of the alleged misconduct
was, an officer or director''; and
(2) by striking ``such officer or director'' and inserting
``such person''.
(f) Officer or Director of an Investment Company.--Section 36(a) of
the Investment Company Act of 1940 (15 U.S.C. 80a-35(a)) is amended--
(1) by striking ``a person serving or acting'' and
inserting ``a person who is, or at the time of the alleged
misconduct was, serving or acting''; and
(2) by striking ``such person so serves or acts'' and
inserting ``such person so serves or acts, or at the time of
the alleged misconduct, so served or acted''.
SEC. 4. SCOPE OF EXEMPTION FROM STATE SECURITIES REGULATION.
Section 18(b)(1) of the Securities Act of 1933 (15 U.S.C.
77r(b)(1)) is amended--
(1) in subparagraph (A)--
(A) by striking ``or the American Stock Exchange,
or listed, or authorized for listing, on the National
Market System of the Nasdaq Stock Market (or any
successor to such entities)'' and inserting ``, the
American Stock Exchange, or the Nasdaq Stock Market (or
any successor to such entities)''; and
(B) by inserting before the semicolon the
following: ``, except that a security listed, or
authorized for listing, on the New York Stock Exchange,
the American Stock Exchange, or the Nasdaq Stock Market
(or any successor to such entities) shall not be a
covered security if the exchange adopts listing
standards pursuant to section 19(b) of the Securities
Exchange Act of 1934 (15 U.S.C. 78s(b)) that designates
a tier or segment of such securities as securities that
are not covered securities for purposes of this section
and such security is listed, or authorized for listing,
on such tier or segment''; and
(2) in subparagraph (B), by inserting ``covered'' after
``applicable to''.
SEC. 5. COVERED SECURITIES.
(a) Warrants and Rights.--Section 18(b)(1) of the Securities Act of
1933 (15 U.S.C. 77r(b)(1)) is amended--
(1) in subparagraph (B), by striking ``or'' at the end;
(2) in subparagraph (C), by striking the period at the end
and inserting ``; or''; and
(3) by adding at the end the following:
``(D) a warrant or right to subscribe to or
purchase any of the foregoing.''.
(b) Exempt Offerings.--Section 18(b)(4)(D) of the Securities Act of
1933 (15 U.S.C. 77r(b)(4)(D)) is amended to read as follows:
``(D) Commission rules or regulations issued under
section 4(2), except that this subparagraph does not
prohibit a State from imposing notice filing
requirements that are substantially similar to those
required by rule or regulation under section 4(2) that
are in effect on September 1, 1996, including
information corresponding to that in all the parts and
the appendix to Form D.''.
SEC. 6. COLLATERAL BARS.
(a) Section 15(b)(6)(A) of the Securities Exchange Act of 1934.--
Section 15(b)(6)(A) of the Securities Exchange Act of 1934 (15 U.S.C.
78o(b)(6)(A)) is amended by striking ``12 months, or bar such person
from being associated with a broker or dealer,'' and inserting ``12
months, or bar any such person from being associated with a broker,
dealer, investment adviser, municipal securities dealer, or transfer
agent,''.
(b) Section 15B(c)(4) of the Securities Exchange Act of 1934.--
Section 15B(c)(4) of the Securities Exchange Act of 1934 (15 U.S.C.
78o-4(c)(4)) is amended by striking ``twelve months or bar any such
person from being associated with a municipal securities dealer,'' and
inserting ``twelve months or bar any such person from being associated
with a broker, dealer, investment adviser, municipal securities dealer,
or transfer agent,''.
(c) Section 17A(c)(4)(C) of the Securities Exchange Act of 1934.--
Section 17A(c)(4)(C) of the Securities Exchange Act of 1934 (15 U.S.C.
78q-1(c)(4)(C)) is amended by striking ``twelve months or bar any such
person from being associated with the transfer agent,'' and inserting
``twelve months or bar any such person from being associated with any
transfer agent, broker, dealer, investment adviser, or municipal
securities dealer,''.
(d) Section 203(f) of the Investment Advisers Act of 1940.--Section
203(f) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-3(f)) is
amended by striking ``twelve months or bar any such person from being
associated with an investment adviser,'' and inserting ``twelve months
or bar any such person from being associated with an investment
adviser, broker, dealer, municipal securities dealer, or transfer
agent,''.
SEC. 7. UNLAWFUL MARGIN LENDING.
Section 7(c)(1)(A) of the Securities Exchange Act of 1934 (15
U.S.C. 78g(c)(1)(A)) is amended by striking ``; and'' and inserting ``;
or''.
SEC. 8. SECURITIES INVESTOR PROTECTION ACT OF 1970 AMENDMENTS.
(a) SIPC Advances.--Section 9(a)(1) of the Securities Investor
Protection Act of 1970 (15 U.S.C. 78fff-3(a)(1)) is amended by
inserting ``or options on commodity futures contracts'' after ``claim
for securities''.
(b) Definitions.--Section 16 of such Act (15 U.S.C. 78lll) is
amended--
(1) by amending paragraph (2) to read as follows:
``(2) Customer.--
``(A) In general.--The term `customer' of a debtor
means any person (including any person with whom the
debtor deals as principal or agent) who has a claim on
account of securities received, acquired, or held by
the debtor in the ordinary course of its business as a
broker or dealer from or for the securities accounts of
such person for safekeeping, with a view to sale, to
cover consummated sales, pursuant to purchases, as
collateral, security, or for purposes of effecting
transfer.
``(B) Included persons.--The term `customer'
includes--
``(i) any person who has deposited cash
with the debtor for the purpose of purchasing
securities;
``(ii) any person who has a claim against
the debtor for cash, securities, futures
contracts, or options on futures contracts
received, acquired, or held in a portfolio
margining account carried as a securities
account pursuant to a portfolio margining
program approved by the Commission; and
``(iii) any person who has a claim against
the debtor arising out of sales or conversions
of such securities.
``(C) Excluded persons.--The term `customer' does
not include--
``(i) any person to the extent that the
claim of such person arises out of transactions
with a foreign subsidiary of a member of SIPC;
or
``(ii) any person to the extent that such
person has a claim for cash or securities which
by contract, agreement, or understanding, or by
operation of law, is part of the capital of the
debtor, or is subordinated to the claims of any
or all creditors of the debtor, notwithstanding
that some ground exists for declaring such
contract, agreement, or understanding void or
voidable in a suit between the claimant and the
debtor.'';
(2) in paragraph (4), by inserting after the first sentence
the following new sentence: ``In the case of portfolio
margining accounts of customers that are carried as securities
accounts pursuant to a portfolio margining program approved by
the Commission, such term shall also include futures contracts
and options on futures contracts received, acquired, or held by
or for the account of a debtor from or for such accounts, and
the proceeds thereof.'';
(3) in paragraph (9), by inserting before ``Such term'' in
the matter following subparagraph (L) the following: ``The term
includes revenues earned by a broker or dealer in connection
with transactions in customers' portfolio margining accounts
carried as securities accounts pursuant to a portfolio
margining program approved by the Commission.''; and
(4) in paragraph (11)--
(A) by amending subparagraph (A) to read as
follows:
``(A) calculating the sum which would have been
owed by the debtor to such customer if the debtor had
liquidated, by sale or purchase on the filing date--
``(i) all securities positions of such
customer (other than customer name securities
reclaimed by such customer); and
``(ii) all positions in futures contracts
and options on futures contracts held in a
portfolio margining account carried as a
securities account pursuant to a portfolio
margining program approved by the Commission;
minus''; and
(B) by inserting before ``In determining'' in the
matter following subparagraph (C) the following: ``A
claim for a commodity futures contract received,
acquired, or held in a portfolio margining account
pursuant to a portfolio margining program approved by
the Commission, or a claim for a security futures
contract, shall be deemed to be a claim for the mark-
to-market (variation) payments due with respect to such
contract as of the filing date, and such claim shall be
treated as a claim for cash.''.
SEC. 9. ANNUAL TESTIMONY ON REDUCING COMPLEXITY IN FINANCIAL REPORTING.
(a) Findings.--Congress finds the following:
(1) Transparent and clear financial reporting is integral
to the continued growth and strength of our capital markets and
the confidence of investors.
(2) The increasing detail and volume of accounting,
auditing, and reporting guidance pose a major challenge.
(3) The complexity of accounting and auditing standards in
the United States has added to the costs and effort involved in
financial reporting.
(b) Testimony Required on Reducing Complexity in Financial
Reporting.--The Securities and Exchange Commission, the Financial
Accounting Standards Board, and the Public Company Accounting Oversight
Board shall annually provide oral testimony by their respective
Chairpersons or a designee of the Chairperson, beginning in 2009, and
for 5 years thereafter, to the Committee on Financial Services of the
House of Representatives on their efforts to reduce the complexity in
financial reporting to provide more accurate and clear financial
information to investors, including--
(1) reassessing complex and outdated accounting standards;
(2) improving the understandability, consistency, and
overall usability of the existing accounting and auditing
literature;
(3) developing principles-based accounting standards;
(4) encouraging the use and acceptance of interactive data;
and
(5) promoting disclosures in ``plain English''.
SEC. 10. EQUAL TREATMENT FOR SELF-REGULATORY ORGANIZATION RULES.
Section 29(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78cc(a)) is amended by striking ``an exchange required thereby'' and
inserting ``a self-regulatory organization''.
SEC. 11. LOST AND STOLEN SECURITIES.
Section 17(f)(1) of the Securities Exchange Act of 1934 (15 U.S.C.
78q(f)(1)) is amended--
(1) in subparagraph (A), by striking ``missing, lost,
counterfeit, or stolen securities'' and inserting ``securities
that are missing, lost, counterfeit, stolen, cancelled, or any
other category of securities as the Commission, by rule, may
prescribe''; and
(2) in subparagraph (B), by striking ``or stolen'' and
inserting ``stolen, cancelled, or reported in such other manner
as the Commission, by rule, may prescribe''.
SEC. 12. FINGERPRINTING.
Section 17(f)(2) of the Securities Exchange Act of 1934 (15 U.S.C.
78q(f)(2)) is amended--
(1) by striking ``and registered clearing agency,'' and
inserting ``registered clearing agency, registered securities
information processor, national securities exchange, and
national securities association''; and
(2) by striking ``or clearing agency,'' and inserting
``clearing agency, securities information processor, national
securities exchange, or national securities association,''.
SEC. 13. CLARIFICATION THAT SECTION 205 OF THE INVESTMENT ADVISERS ACT
OF 1940 DOES NOT APPLY TO STATE-REGISTERED ADVISERS.
Section 205(a) of the Investment Advisers Act of 1940 (15 U.S.C.
80b-5(a)) is amended--
(1) by striking ``, unless exempt from registration
pursuant to section 203(b),'' and inserting ``registered or
required to be registered with the Commission'';
(2) by striking ``make use of the mails or any means or
instrumentality of interstate commerce, directly or indirectly,
to''; and
(3) by striking ``to'' after ``in any way''.
SEC. 14. AMENDMENTS TO SECTION 31 OF THE SECURITIES EXCHANGE ACT OF
1934.
Section 31 of the Securities Exchange Act of 1934 (15 U.S.C. 78ee)
is amended--
(1) in subsection (e)(2), by striking ``September 30'' and
inserting ``September 25''; and
(2) in subsection (g), by striking ``April 30'' and
inserting ``August 31''.
SEC. 15. PROTECTING CONFIDENTIALITY OF MATERIALS SUBMITTED TO
COMMISSION.
(a) Securities Exchange Act of 1934.--Section 17(j) of the
Securities Exchange Act of 1934 (15 U.S.C. 78q(j)) is amended to read
as follows:
``(j) Authority To Limit Disclosure of Information.--
Notwithstanding any other provision of law, the Commission shall not be
compelled to disclose any information, documents, records, or reports
that relate to an examination of a person subject to or described in
this section, including subsection (i)(5)(A), or the financial or
operational condition of such persons, or any information supplied to
the Commission by any domestic or foreign regulatory agency that
relates to the financial or operational condition of such persons, of
any associated person of such persons, or any affiliate of an
investment bank holding company. Nothing in this subsection shall
authorize the Commission to withhold information from Congress, or
prevent the Commission from complying with a request for information
from any other Federal department or agency or any self-regulatory
organization requesting the information for purposes within the scope
of its jurisdiction. Nothing in this subsection shall prevent the
Commission from complying with an order of a court of the United States
in an action brought by the United States or the Commission against
such a person to produce information, documents, records, or reports
relating directly to the examination of that person or the financial or
operational condition of that person or an associated or affiliated
person of that person. For purposes of section 552 of title 5, United
States Code, this subsection shall be considered a statute described in
subsection (b)(3)(B) of such section 552. In prescribing regulations to
carry out the requirements of this subsection, the Commission shall
designate information described in or obtained pursuant to
subparagraphs (A), (B), and (C) of subsection (i)(3) as confidential
information for purposes of section 24(b)(2) of this title.''.
(b) Investment Company Act of 1940.--Section 31(b) of the
Investment Company Act of 1940 (15 U.S.C. 80a-30(b)) is amended by
adding at the end the following:
``(4) Confidentiality.--Notwithstanding any other provision
of law, the Commission shall not be compelled to disclose any
information, documents, records, or reports that relate to an
examination of a person subject to or described in this
section. Nothing in this subsection shall authorize the
Commission to withhold information from Congress, or prevent
the Commission from complying with a request for information
from any other Federal department or agency requesting the
information for purposes within the scope of its jurisdiction.
Nothing in this subsection shall prevent the Commission from
complying with an order of a court of the United States in an
action brought by the United States or the Commission against
such a person to produce information, documents, records, or
reports relating directly to the examination of that person or
the financial or operational condition of that person or an
associated or affiliated person of that person. For purposes of
section 552 of title 5, United States Code, this subsection
shall be considered a statute described in subsection (b)(3)(B)
of such section 552.''.
(c) Investment Advisers Act of 1940.--Section 204 of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-4) is amended by adding at the end
the following new subsection:
``(d) Confidentiality.--Notwithstanding any other provision of law,
the Commission shall not be compelled to disclose any information,
documents, records, or reports that relate to an examination of a
person subject to or described in this section. Nothing in this
subsection shall authorize the Commission to withhold information from
Congress, or prevent the Commission from complying with a request for
information from any other Federal department or agency requesting the
information for purposes within the scope of its jurisdiction. Nothing
in this subsection shall prevent the Commission from complying with an
order of a court of the United States in an action brought by the
United States or the Commission against such a person to produce
information, documents, records, or reports relating directly to the
examination of that person or the financial or operational condition of
that person or an associated or affiliated person of that person. For
purposes of section 552 of title 5, United States Code, this subsection
shall be considered a statute described in subsection (b)(3)(B) of such
section 552.''.
SEC. 16. SHARING PRIVILEGED INFORMATION WITH OTHER AUTHORITIES.
Section 24 of the Securities Exchange Act of 1934 (15 U.S.C. 78x)
is amended--
(1) by redesignating subsections (d) and (e) as subsections
(e) and (f), respectively;
(2) in subsection (e), as redesignated, by striking ``as
provided in subsection (e)'' and inserting ``as provided in
subsection (f)''; and
(3) by inserting after subsection (c) the following new
subsection (d)--
``(d) Sharing Privileged Information With Other Authorities.--
``(1) Privileged information provided by the commission.--
The Commission shall not be deemed to have waived any privilege
applicable to any information by transferring that information
to or permitting that information to be used by--
``(A) any agency (as defined in section 6 of title
18, United States Code);
``(B) any foreign securities authority;
``(C) any foreign law enforcement authority; or
``(D) any State securities or law enforcement
authority.
``(2) Non-disclosure of privileged information provided to
the commission.--Except as provided in subsection (f), the
Commission shall not be compelled to disclose privileged
information obtained from any foreign securities authority, or
foreign law enforcement authority, if the authority has in good
faith determined and represented to the Commission that the
information is privileged.
``(3) Non-waiver of privileged information provided to the
commission.--No Federal agency or State securities or law
enforcement authority shall be deemed to have waived any
privilege applicable to any information by transferring that
information to or permitting that information to be used by the
Commission.
``(4) Definitions.--For purposes of this subsection:
``(A) The term `privilege' includes any work-
product privilege, attorney-client privilege,
governmental privilege, or other privilege recognized
under Federal, Foreign, or State law.
``(B) The term `foreign law enforcement authority'
means any foreign authority that is empowered under
foreign law to detect, investigate or prosecute
potential violations of law.
``(C) The term `State securities or law enforcement
authority' means the authority of any State or
territory that is empowered under State or territory
law to detect, investigate or prosecute potential
violations of law.''.
SEC. 17. TECHNICAL CORRECTIONS.
(a) Securities Act of 1933.--The Securities Act of 1933 (15 U.S.C.
77a et seq.) is amended--
(1) in section 3(a)(4) (15 U.S.C. 77c(a)(4)), by striking
``individual;'' and inserting ``individual,'';
(2) in section 18(b)(1)(C) (15 U.S.C. 77r(b)(1)(C)), by
striking ``is a security'' and inserting ``a security'';
(3) in section 18(c)(2)(B)(i) (15 U.S.C. 77r(c)(2)(B)(i)),
by striking ``State, or'' and inserting ``State or'';
(4) in section 19(d)(6)(A) (15 U.S.C. 77s(d)(6)(A)), by
striking ``in paragraph (1) of (3)'' and inserting ``in
paragraph (1) or (3)''; and
(5) in section 27A(c)(1)(B)(ii) (15 U.S.C. 77z-
2(c)(1)(B)(ii)), by striking ``business entity;'' and inserting
``business entity,''.
(b) Securities Exchange Act of 1934.--The Securities Exchange Act
of 1934 (15 U.S.C. 78 et seq.) is amended--
(1) in section 2(1)(a) (15 U.S.C. 78b(1)(a)), by striking
``affected'' and inserting ``effected'';
(2) in section 3(a)(55)(A) (15 U.S.C. 78c(a)(55)(A)), by
striking ``section 3(a)(12) of the Securities Exchange Act of
1934'' and inserting ``section 3(a)(12) of this Act'';
(3) in section 3(g) (15 U.S.C. 78c(g)), by striking
``company, account person, or entity'' and inserting ``company,
account, person, or entity'';
(4) in section 10A(i)(1)(B)(i) (15 U.S.C. 78j-
1(i)(1)(B)(i)), by striking ``nonaudit'' and inserting ``non-
audit'';
(5) in section 13(b)(1) (15 U.S.C. 78m(b)(1)), by striking
``earning statement'' and inserting ``earnings statement'';
(6) in section 15(b)(1) (15 U.S.C. 78o(b)(1))--
(A) by striking the sentence beginning ``The order
granting'' and ending ``from such membership.'' in
subparagraph (B); and
(B) by inserting such sentence in the matter
following such subparagraph after ``are satisfied.'';
(7) in section 15 (15 U.S.C. 78o), by redesignating
subsection (i), as added by section 303(f) of the Commodity
Futures Modernization Act of 2000 (114 Stat. 2763A-455), as
subsection (j);
(8) in section 15C(a)(2) (15 U.S.C. 78o-5(a)(2))--
(A) by redesignating clauses (i) and (ii) as
subparagraphs (A) and (B), respectively;
(B) by striking the sentence beginning ``The order
granting'' and ending ``from such membership.'' in such
subparagraph (B), as redesignated; and
(C) by inserting such sentence in the matter
following such redesignated subparagraph after ``are
satisfied.'';
(9) in section 16(a)(2)(C) (15 U.S.C. 78p(a)(2)(C)), by
striking ``section 206(b)'' and inserting ``section 206B'';
(10) in section 17(b)(1)(B) (15 U.S.C. 78q(b)(1)(B)), by
striking ``15A(k) gives'' and inserting ``15A(k), give''; and
(11) in section 21C(c)(2) (15 U.S.C. 78u-3(c)(2)), by
striking ``paragraph (1) subsection'' and inserting ``Paragraph
(1)''.
(c) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
(15 U.S.C. 77aaa et seq.) is amended--
(1) in section 304(b) (15 U.S.C. 77ddd(b)), by striking
``section 2 of such Act'' and inserting ``section 2(a) of such
Act'';
(2) in section 313(a)(4) (15 U.S.C. 77mmm(a)(4)) by
striking ``subsection 311'' and inserting ``section 311(b)'';
and
(3) in section 317(a)(1) (15 U.S.C. 77qqq(a)(1)), by
striking ``(1),'' and inserting ``(1)''.
(d) Investment Company Act of 1940.--The Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a)(19) (15 U.S.C. 80a-2(a)(19)) by
striking ``clause (vi)'' both places it appears in the last two
sentences and inserting ``clause (vii)'';
(2) in section 9(b)(4)(B) (15 U.S.C. 80a-9(b)(4)(B)), by
inserting ``or'' after the semicolon at the end;
(3) in section 12(d)(1)(J) (15 U.S.C. 80a-12(d)(1)(J)), by
striking ``any provision of this subsection'' and inserting
``any provision of this paragraph'';
(4) in section 13(a)(3) (15 U.S.C. 80a-13(a)(3)), by
inserting ``or'' after the semicolon at the end;
(5) in section 17(f)(4) (15 U.S.C. 80a-17(f)(4)), by
striking ``No such member'' and inserting ``No member of a
national securities exchange'';
(6) in section 17(f)(6) (15 U.S.C. 80a-17(f)(6)), by
striking ``company may serve'' and inserting ``company, may
serve''; and
(7) in section 61(a)(3)(B)(iii) (15 U.S.C. 80a-
60(a)(3)(B)(iii))--
(A) by striking ``paragraph (1) of section 205''
and inserting ``section 205(a)(1)''; and
(B) by striking ``clause (A) or (B) of that
section'' and inserting ``section 205(b)(1) or (2)''.
(e) Investment Advisers Act of 1940.--The Investment Advisers Act
of 1940 (15 U.S.C. 80b-1 et seq.) is amended--
(1) in each of the following sections, by striking
``principal business office'' or ``principal place of
business'' (whichever and wherever it appears) and inserting
``principal office and place of business'': sections
203(c)(1)(A), 203(k)(4)(B), 213(a), 222(b), and 222(c) (15
U.S.C. 80b-3(c)(1)(A), 80b-3(k)(4)(B), 80b-13(a), 80b-18a(b),
and 80b-18a(c)); and
(2) in section 206(3) (15 U.S.C. 80b-6(3)), by inserting
``or'' after the semicolon at the end.
SEC. 18. CONFORMING AMENDMENTS FOR THE REPEAL OF THE PUBLIC UTILITY
HOLDING COMPANY ACT OF 1935.
(a) Securities Exchange Act of 1934.--The Securities Exchange Act
of 1934 (15 U.S.C. 78 et seq.) is amended--
(1) in section 3(a)(47) (15 U.S.C. 78c(a)(47)), by striking
``the Public Utility Holding Company Act of 1935 (15 U.S.C. 79a
et seq.),''; and
(2) in section 12(k) (15 U.S.C. 78l(k)), by amending
paragraph (7) to read as follows:
``(7) Definition.--For purposes of this subsection, the
term `emergency' means--
``(A) a major market disturbance characterized by
or constituting--
``(i) sudden and excessive fluctuations of
securities prices generally, or a substantial
threat thereof, that threaten fair and orderly
markets; or
``(ii) a substantial disruption of the safe
or efficient operation of the national system
for clearance and settlement of transactions in
securities, or a substantial threat thereof; or
``(B) a major disturbance that substantially
disrupts, or threatens to substantially disrupt--
``(i) the functioning of securities
markets, investment companies, or any other
significant portion or segment of the
securities markets; or
``(ii) the transmission or processing of
securities transactions.''.
(3) in section 21(h)(2) (15 U.S.C. 78u(h)(2)), by striking
``section 18(c) of the Public Utility Holding Company Act of
1935,''.
(b) Trust Indenture Act of 1939.--The Trust Indenture Act of 1939
(15 U.S.C. 77aaa et seq.) is amended--
(1) in section 303 (15 U.S.C. 77ccc), by amending paragraph
(17) to read as follows:
``(17) The terms `Securities Act of 1933' and `Securities
Exchange Act of 1934' shall be deemed to refer, respectively,
to such Acts, as amended, whether amended prior to or after the
enactment of this title.'';
(2) in section 308 (15 U.S.C. 77hhh), by striking
``Securities Act of 1933, the Securities Exchange Act of 1934,
or the Public Utility Holding Company Act of 1935'' each place
it appears and inserting ``Securities Act of 1933 or the
Securities Exchange Act of 1934'';
(3) in section 310 (15 U.S.C. 77jjj), by striking
subsection (c) (including the preceding heading);
(4) in section 311 (15 U.S.C. 77kkk) by striking subsection
(c);
(5) in section 323(b) (15 U.S.C. 77www(b)), by striking
``Securities Act of 1933, or the Securities Exchange Act of
1934, or the Public Utility Holding Company Act of 1935'' and
inserting ``Securities Act of 1933 or the Securities Exchange
Act of 1934''; and
(6) in section 326 (15 U.S.C. 77zzz), by striking
``Securities Act of 1933, or the Securities Exchange Act of
1934, or the Public Utility Holding Company Act of 1935,'' and
inserting ``Securities Act of 1933 or the Securities Exchange
Act of 1934''.
(c) Investment Company Act of 1940.--The Investment Company Act of
1940 (15 U.S.C. 80a-1 et seq.) is amended--
(1) in section 2(a)(44) (15 U.S.C. 80a-2(a)(44)), by
striking ```Public Utility Holding Company Act of 1935','';
(2) in section 3(c) (15 U.S.C. 80a-3(c)), by amending
paragraph (8) to read as follows:
``(8) [Repealed]'';
(3) in section 38(b) (15 U.S.C. 80a-37(b)), by striking
``the Public Utility Holding Company Act of 1935,''; and
(4) in section 50 (15 U.S.C. 80a-49), by striking ``the
Public Utility Holding Company Act of 1935,''.
(d) Investment Advisers Act of 1940.--Section 202(a)(21) of the
Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(21)) is amended by
striking ```Public Utility Holding Company Act of 1935',''.
SEC. 19. NATIONWIDE SERVICE OF SUBPOENAS.
(a) Securities Act of 1933.--Section 22(a) of the Securities Act of
1933 (15 U.S.C. 77v(a)) is amended by inserting after the second
sentence the following: ``In any action or proceeding instituted by the
Commission under this title in a United States district court for any
judicial district, subpoenas issued by or on behalf of such court to
compel the attendance of witnesses or the production of documents or
tangible things (or both) may be served in any other district. Such
subpoenas may be served and enforced without application to the court
or a showing of cause, notwithstanding the provisions of rule 45(b)(2),
(c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules of Civil
Procedure.''.
(b) Securities Exchange Act of 1934.--Section 27 of the Securities
Exchange Act of 1934 (15 U.S.C. 78aa) is amended by inserting after the
third sentence the following: ``In any action or proceeding instituted
by the Commission under this title in a United States district court
for any judicial district, subpoenas issued by or on behalf of such
court to compel the attendance of witnesses or the production of
documents or tangible things (or both) may be served in any other
district. Such subpoenas may be served and enforced without application
to the court or a showing of cause, notwithstanding the provisions of
rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the Federal Rules
of Civil Procedure.''.
(c) Investment Company Act of 1940.--Section 44 of the Investment
Company Act of 1940 (15 U.S.C. 80a-43) is amended by inserting after
the fourth sentence the following: ``In any action or proceeding
instituted by the Commission under this title in a United States
district court for any judicial district, subpoenas issued by or on
behalf of such court to compel the attendance of witnesses or the
production of documents or tangible things (or both) may be served in
any other district. Such subpoenas may be served and enforced without
application to the court or a showing of cause, notwithstanding the
provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the
Federal Rules of Civil Procedure.''.
(d) Investment Advisers Act of 1940.--Section 214 of the Investment
Advisers Act of 1940 (15 U.S.C. 80b-14) is amended by inserting after
the third sentence the following: ``In any action or proceeding
instituted by the Commission under this title in a United States
district court for any judicial district, subpoenas issued by or on
behalf of such court to compel the attendance of witnesses or the
production of documents or tangible things (or both) may be served in
any other district. Such subpoenas may be served and enforced without
application to the court or a showing of cause, notwithstanding the
provisions of rule 45(b)(2), (c)(3)(A)(ii), and (c)(3)(B)(iii) of the
Federal Rules of Civil Procedure.''.
<all>